Phishing attacks are one of the highest visibility problems for banking and e-commerce sites, with the potential to destroy a customer’s livelihood and credit rating. There are a few precautions that application writers can follow to reduce the risk, but most phishing controls are procedural and user education.

Phishing is a completely different approach from most scams. In most scams, there is misrepresentation and the victim is clearly identifiable. In phishing, the lines are blurred:

The identify theft victim is a victim. And they will be repeatedly victimized for years. Simply draining their bank account is not the end. Like all types of identity theft, the damage is never completely resolved. Just when the person thinks that everything has finally been cleaned up, the information is used again.

Banks, ISPs, stores and other phishing targets are victimized – they suffer a huge loss of reputation and trust by consumers. If you received a legitimate email from Citibank today, would you trust it?

What is Phishing?

Phishing is misrepresentation where the criminal uses social engineering to appear as a trusted identity. They leverage the trust to gain valuable information; usually details of accounts, or enough information to open accounts, obtain loans, or buy goods through e-commerce sites.

Up to 5% of users seem to be lured into these attacks, so it can be quite profitable for scammers – many of whom send millions of scam e-mails a day.

The basic phishing attack follows one or more of these patterns:

Delivery via web site, e-mail or instant message, the attack asks users to click on a link to “re-validate” or “re-activate” their account. The link displays a believable facsimile of your site and brand to con users into submitting private details

Sends a threatening e-mail to users telling them that the user has attacked the sender. There’s a link in the e-mail which asks users to provide personal details

Installs spyware that watches for certain bank URLs to be typed, and when typed, up pops a believable form that asks the users for their private details

Installs spyware (such as Berbew) that watches for POST data, such as usernames and passwords, which is then sent onto a third party system

Installs spyware (such as AgoBot) that dredges the host PC for information from caches and cookies

“Urgent” messages that the user’s account has been compromised, and they need to take some sort of action to “clear it up”

Messages from the “Security” section asking the victim to check their account as someone illegally accessed it on this date. Just click this trusty link…

Worms have been known to send phishing e-mails, such as MiMail, so delivery mechanisms constantly evolve. Phishing gangs (aka organized crime) often use malicious software like Sasser or SubSeven to install and control zombie PCs to hide their actions, provide many hosts to receive phishing information, and evade the shutdown of one or two hosts.

Sites that are not phished today are not immune from phishing tomorrow. Phishers have a variety of uses for stolen accounts -- any kind of e-commerce is usable. For example:

Bank accounts: Steal money. But other uses: Money laundering. If they cannot convert the money to cash, then just keep it moving. Just because you don't have anything of value sitting in the account does not mean that the account has no value. Many bank accounts are linked. So compromising one will likely compromise many others. Bank accounts can lead to social security numbers and other account numbers. (Do you pay bills using an auto-pay system? Those account numbers are also accessible. Same with direct deposit.)

PayPal: All the benefits of a bank without being a bank. No FDIC paper trail.

eBay: Laundering.

Western Union: "Cashing out". Converting stolen money to cash.

Online music and other e-commerce stores. Laundering. Sometimes goods (e.g., music) are more desirable than money. Cashing out takes significant resources. Just getting music (downloadable, instant, non-returnable) is easy. And easy is sometimes desirable.

ISP accounts. Spamming, compromising web servers, virus distribution, etc. Could also lead to bank accounts. For example, if you use auto-pay from your bank to your ISP, then the ISP account usually leads to the bank account number.

It is not enough to not trust emails from banks. You need to question emails from all sources.

Deploy SPF

SPF - Sender Policy Framework - http://www.openspf.org/ - is a simple addition you can make to your DNS servers to alow recipients to authenticate email messages you send. After you're SPF-Enabled, any phishing emails that attempt to spoof your legitimate email domain will be erased by all good anti-spam software, thus preventing victims from ever receiving the phish emails. DKIM - DomainKeys Identified Mail - http://www.dkim.org/ - is another similar system, albeit more resource intensive.

User Education

Users are the primary attack vector for phishing attacks. Without training your users to be wary of phishing attempts, they will fall victim to phishing attacks sooner or later. It is insufficient to say that users shouldn’t have to worry about this issue, but unfortunately, there are few effective technical security controls that work against phishing attempts as attackers are constantly working on new and interesting methods to defraud users. Users are the first, and often the last, lines of defense, and therefore any workable solution must include them.

Create a policy detailing exactly what you will and will not do. Regularly communicate the policy in easy to understand terms (as in “My Mom will understand this”) to users. Make sure they can see your policies on your web site.

From time to time, ask your users to confirm that they have installed anti-virus software, anti-spyware, keep it up to date, scanned recently, and have updated their computer with patches recently. This keeps basic computer hygiene in the users’ minds, and they know they shouldn’t ignore it. Consider teaming with anti-virus firms to offer special deals to your users to provide low cost protection for them (and you).

However, be aware that user education is difficult. Users have been lulled into “learned helplessness”, and actively ignore privacy policies, security policies, license agreements, and help pages. Do not expect them to read anything you communicate with them.

Make it easy for your users to report scams

Monitor abuse@yourdomain.com and consider setting up a feedback form. Users are often your first line of defense, and can alert you far sooner than simply waiting for the first scam victims to come forward. Every minute of a phishing scam counts.

Communicating with customers via e-mail

Customer relationship management (CRM) is a huge business, so it’s highly improbable that you can prevent your business from sending customers marketing materials. However, it is vital to communicate with users in a safe way:

Education - Tell users every single time you communicate with them, that:

they must type your URL into their browser to access your site

you don’t provide links for them to click

you will never ask them for their secrets

and if they receive any such messages, they should immediately report any such e-mail to you, and you will forward that on to their local law enforcement agencies

Consistent branding – don’t send e-mail that references another company or domain. If your domain is “example.com”, then all links, URLs, and email addresses should strictly reference “example.com”. Using mixed brands and multiple domains – even when your company owns the multiple domain names – generates user confusion and permits attackers to impersonate your company.

Reduce Risk - don’t send e-mail at all. Communicate with your users using your website rather than e-mail. The advantages are many: the content can be in HTML, it’s more secure (as the content cannot be easily spoofed by phishers), it is much cheaper than mass mailing, doesn’t involve spamming the Internet, and your customers are aware that you never send e-mail, so any e-mail received from “you” is fraudulent.

Reduce Risk - be careful of using “short” obfuscated URLs (like http://redir.example.com/f45jgk) for users to type in, as scammers may be able to work out how to use your obfuscation process to redirect users to a scam site. In general, be wary of redirection facilities – nearly all of them are vulnerable to XSS.

Increase trust - Many large organizations outsource customer communications to third parties. Work with these organizations to make all e-mail communications appear to come from your organization (i.e., crm.example.com where example.com is your domain, rather than smtp34.massmailer.com or even worse, just an IP address). This goes for any image providers that are used in the main body.

Increase trust - set up a Sender Policy Framework (SPF) record in your DNS to validate your SMTP servers. Phishing e-mails not sent from servers listed in your SPF records will be rejected by SPF aware MTAs. If that fails, scam messages will be flagged by newer MUAs like Outlook 2003 (with recent product updates applied), Thunderbird, and Eudora. Over time, this control will become more and more effective as ISPs, users and organizations upgrade to versions of software that has SPF enabled by default

Incident Response - Don’t send users e-mail notification that their account has been locked or fraud has occurred – if that has happened, just lock their accounts and provide a telephone number or e-mail address for them to contact you

Never ask your customers for their secrets

Scammers will often ask your users to provide their credit card number, password or PIN to “reactivate” their accounts. Often the scammers will present part of a credit card number or some other verifier (such as mother’s maiden name – which is obtainable via public records), which makes the phish more believable.

Make sure your processes never need users’ secrets; even partial secrets like the last four digits of a credit card, or rely on easily available “secrets” that are obtainable from public records or credit history transcripts.

Tell the users you will not ask them for secrets, and to notify you if they receive an e-mail or visit a web page that looks like you and requires them to type in their secrets.

Fix all your XSS issues

Do not expose any code that has Cross-site Scripting (XSS) issues, particularly unauthenticated code. Phishers often target vulnerable code, such as redirectors, search fields, and other forms on your website to push the user to their attack sites in a believable way.

For more information on XSS prevention, please see the User Agent Injection section of the Interpreter Injection chapter.

Do not use pop-ups

Pop-ups are a common technique used by scammers to make it seem like they are coming from your domain. If you don’t use them, it makes it much more difficult for scammers to take over a user’s session without being detected.

Tell your users you do not use pop-ups and to report any examples to you immediately.

Don’t be framed

As pop-ups are now blocked by default by most browsers, phishers have started to use iframes and frames to host malicious content whilst hosting your actual application. They can then use bugs or features of the DOM model to discover secrets in your application.

Use the TARGET directive to create a new window, which will usually break out of IFRAME and other JavaScript jails. This usually means using something like:

Your application should regularly check the DOM model to inspect your client’s environment for what you expect to see, and reject access attempts that contain any additional frames.

This doesn’t help with Browser Helper Objects (BHO’s) or spyware toolbars, but it can help close down many scams.

Move your application one link away from your front page

It is possible to diminish native phishing attacks:

Make the authenticator for your application on a separate page.

Consider implementing a simple referrer check. In section 11.11, we show that referrer fields are easily spoofed by motivated attackers, so this control doesn’t really work that well against even moderately skilled attackers, but closes off links in e-mails as being an attack vector.

Encourage your users to type your URL or simply don’t provide a link for them to click.

Referrer checks are effective against indirect attackers such as phishers – a hostile site cannot force a user’s browser to send forged referrer headers.

Enforce local referrers for images and other resources

Scammers will try to use actual images from your web site, or from partner web sites (such as loyalty programs or edge caching partners providing faster, nearby versions of images).

Make the scammers use their own saved copies as this increases the chances that they will get it wrong, or the images will have changed by the time the attack is launched.

The feature is typically called “anti-leeching”, and is implemented in most of the common web servers but disabled by default in most. Akamai, which calls this feature “Request Based Blocking”, and hopefully all edge caching businesses, can provide this service to their customers.

Consider using watermarked images, so you can determine when the image was obtained so you can trace the original spider. It may not be possible to do this for busy websites, but it may be useful to watermark an image once per day in such cases.

Investigate all accesses that enumerate your entire website or only access images – you can spider your own website to see what it looks like and to capture a sequence of access entries that can be used to identify such activity. Often the scammers are using their own PCs to do this activity, so you may be able to provide law enforcement with probable IP addresses to chase down.

Keep the address bar, use SSL, do not use IP addresses

Many web sites try to stop users seeing the address bar in a weak attempt to prevent the user tampering with data, prevent users from book marking your site, or pressing back, or some other feature. All of these excuses do not help users avoid phishing attacks.

Data that is user sensitive should be moved to the session object or – at worst – tamperproof, hidden fields. Book marking does not work if authorization enforces login requirements. Pressing back can be defeated in two ways – JavaScript hacks and sequence cookies.

Users should always be able to see your domain name – not IP addresses. This means you will need to register all your hosts rather than push them to IP addresses.

Don’t be the source of identity theft

If you hold a great deal of data about a user, as a bank or government institution might, do not allow applications to present this data to end users.

For example, Internet Banking solutions may allow users to update their physical address records. There is no point in displaying the current address within the application, so the Internet Banking solution’s database doesn’t need to hold address data – only back end systems do.

In general, minimize the amount of data held by the application. If it’s not there to be pharmed, the application is safer for your users.

Implement safe-guards within your application

Consider implementing:

If you’re an ISP or DNS registrar, make the registrant wait 24 hours for access to their domain; often scammers will register and dump a domain within the first 24 hours as the scam is found out.

If an account is opened, but not used for a period of time (say a week or a month), disable it.

Does all the registration info check out? For example, does the ZIP code mean California, but the phone number come from New York? If it doesn’t, don’t enable the account.

Daily limits, particularly for unverified customers.

Settlement periods for offsite transactions to allow users time to repudiate transactions.

Only deliver goods to the customer’s home country and address as per their billing information (i.e., don’t ship a camera to Fiji if the customer lives in Noumea)

Only deliver goods to verified customers (or consider a limit for such transactions).

If your application allows updates to e-mail addresses or physical addresses, send a notification to both the new and old addresses when the key contact details change. This allows fraudulent changes to be detected by the user.

Do not send existing or permanent passwords via e-mails or physical mail. Use one time, time limited verifiers instead. Send notification to the user that their password has been changed using this mechanism.

Implement SMS or e-mail notification of account activities, particularly those involving transfers and change of address or phone details.

Prevent too many transactions from the same user being performed in a certain period of time – this slows down automated attacks.

Two factor authentication for highly sensitive or high value transactional accounts.

Monitor unusual account activity

Use heuristics and other business logic to determine if users are likely to act on a certain sequence of events, such as:

Clearing out their accounts

Conducting many small transactions to get under your daily limits or other monitoring schemes

If orders from multiple accounts are being delivered to the same shipping address.

If the same transactions are being performed quickly from the same IP address

Prevent pharming - Consider staggering transaction delays using resource monitors or add a delay. Each transaction will increase the delay by a random, but increasing, amount so that by the 3rd or certainly by the 10th transaction, the delay is significant (3 minutes or more between pages).

Get the phishing target servers offline pronto

Work with law enforcement agencies, banking regulators, ISPs and so on to get the phishing victim server (or servers) offline from the Internet as quickly as possible. This does not mean destroy!

These systems contain a significant amount of information about the phisher, so never destroy the system – if the world was a perfect place, it should be forensically imaged and examined by a competent computer forensic examiner. Any new malicious software identified should be handed over to as many anti-virus and anti-spyware companies as possible.

Zombie and phishing server victims are usually unaware that their host has been compromised and they’ll be grateful that you’ve spotted it, so don’t try for a dawn raid with the local SWAT team.

If you think the server is under the direct control of a scammer, you should let the law enforcement agencies handle the issue, as you should never deal with the scammer directly for safety reasons.

If you represent an ISP, it’s important to understand that simply wiping and re-imaging the server, whilst good for business, practically guarantees that your systems will be repeatedly violated by the same organized crime gangs. Of all the phishing victims, ISPs need to take the most care in finding and resolving these cases, and work with local and international law enforcement.

Take control of the fraudulent domain name

Many scammers try to use homographs and similar or mis-spelt domain names to spoof your web site. For example, if a user sees http://www.example.com, but the x in example is a homograph from another character set, or the user sees misspellings such as http://www.exmaple.com/ or http://www.evample.com/ the average user will not notice the difference.

It is important to use the dispute resolution process of the domain registrar to take control of this domain as quickly as possible. Once it’s in your control, it cannot be re-used by attackers in the future. Once you have control, lock the domain so it cannot be transferred away from you without signed permission.

Limitations with this approach include

There are an awful lot of domains variations, so costs can mount up

It can be slow, particularly with some DRP policies – disputes can take many months and a lawyer’s picnic of cash to resolve

Monitoring a TLD like .COM is nearly impossible – particularly in competitive regimes

Some disputes cannot be won if you don’t hold a trademark or registration mark for your name, and even then…

Organized crime is organized – some even own their own registrars or work so closely with them as to be indistinguishable from them.

Work with law enforcement

The only way to get rid of the problem is to put the perpetrators away. Work with your law enforcement agencies – help them make it easier to report the crime, handle the evidence properly, and prosecute. Don’t forward every e-mail or ask your users to do this, as it’s the same crime. Collate evidence from your users, report it once, and make it obvious that you take fraud seriously.

Help your users sue the scammers for civil damages. For example, advise clients of their rights and whether class action lawsuits are possible against the scammers.

Unfortunately, many scammers come from countries with weak or non-existent criminal laws against fraud and phishing. In addition, many scammers belong to (or act on behalf of) organized crime. It is dangerous to contact these criminals directly, so always heed the warnings of your law enforcement agencies and work through them.

When an attack happens

Be nice to your users – they are the unwitting victims. If you want to retain a customer for life, this is the time to be nice to them. Help them every step of the way.

Have a phishing incident management policy ready and tested. Ensure that everyone knows their role to restrict the damage caused by the attacks.

If you are a credit reporting agency or work with a regulatory body, make it possible for legitimate victims to move credit identities. This will allow the user’s prior actual history to be retained, but flag any new access as pure fraud.